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Today our DEAL TALKS meets Rait Ojasaar, the investment partner from our member firm Change Ventures, to talk about their latest investment into Planet42 – a platform that combines fintech and mobility services in the South African market. Planet42 partners with dealerships across South Africa to offer car access to largely underbanked clientele.
1. What makes Planet42 unique?
Planet42 is a mobility fintech that is serving the market that banks and other incumbents refuse to deal with. In their first market South Africa, this is done via a rent-to-buy model, where Planet42 buys a second-hand car from a dealership and rents it out to the end-customer. Planet42 is utilising super lean and efficient market expansion models, reaching its clients via a network of car dealerships (0 marketing cost), and using an automated scoring algorithm to process client applications. The business model is highly leverageable, as lenders can take the vehicles as security and so Planet42 relies heavily on debt funding - much more than a typical start-up would.2.How is the investment used?
Aside from expanding the vehicle portfolio by buying more cars, the investment will enable Planet42 to attract significant additional debt funding, projected to be 10x the amount of equity raised. Planet42 has currently delivered nearly 2,000 vehicles to its clients and plans to grow the vehicle portfolio to 100,000 cars by 2024 in South Africa alone.
3. Impact and diversity
Planet42 has a significant social impact as it is providing inclusive mobility solutions to the underbanked. More than 24 million people are credit impaired or have no access to finance in South Africa, but people still need to get around. Most customers would not have access to a personal vehicle without the service offered by Planet42. The founders are scandalously un-diverse (2 white guys from Estonia), however, most of the team is comprised of South Africans with a very healthy mix of different races, genders, sexual preferences, etc.
Key advisors of the deal
Change Ventures was advised by Cobalt Legal.